Whose Priorities Will Be Trump in 2012?

By Edelman and Flinchbaugh

© Copyright Agri-Pulse Communications, Inc.

ME. Professor, whose priorities for agriculture will trump the policy agenda in 2012? No, I am not referring to "the Donald's" on again, off again interest in Presidential politics. But, I am conflicted with all the political rhetoric spewed out across Iowa in recent months. While anyone can decide to run for President, having more candidates in the field increases the odds for nonsensical rhetoric. The field will start to be winnowed in number on January 3, which is Iowa Caucus night.

BF. Perhaps as the number of candidates starts to decline, a more clear and concise rationale for future policy direction will begin to appear. I see the Des Moines Register reported a Voter's Guide from Iowa's Corn Growers in which Speaker Gingrich and Senator Santorum received "A's" for their positions on Agriculture, Energy and Trade Policy issues. President Obama and Governor Romney received "B's." Representatives Bachmann and Paul received "D's," while Governor Perry was unrated in the article.

ME. Those conclusions appear to be underscored by the Voter Guide distributed by Iowa's Renewable Fuel Association based on four proxy issues: Affirmation of Support for the Renewable Fuel Standard, Support for a Fair and Equitable Energy Tax Policy, Opposition to Efforts that Limit Consumer Choice by Banning E-15, and Support for Programs to promote Flex Fuel Vehicles and Blender Pumps. President Obama, Governor Romney, Speaker Gingrich, and Senator Santorum responded in accord with Iowa Corn's positions on all four questions. Representatives Bachmann and Paul supported two of the four positions. Governor Perry supported none of the four positions.

Together we can feed the Bees

BF. Being from a "Big Oil" state, Governor Perry has apparently been less supportive of positions favored by Midwestern agriculture. In recent statements, he "wants to get the federal government out of the business of picking energy winners and losers," but then "turn that power over to the states." It doesn't take much imagination to predict that states would "pick their favorite" local energy source and favorite "winners and losers."

ME. The notion of allowing states to do their own thing is contrasted by last week's Federal Court decision which declared California's Low Carbon Fuel Standard (LCFS) to be "unconstitutional" with respect to Commerce Clause of the U.S. Constitution. Two national groups-Growth Energy and the Renewable Fuels Association-filed suit in 2009 and asserted that the California law violates the Commerce Clause by seeking to regulate farming and ethanol production practices in other states. While a Federal District Judge's decision is never final as it can be appealed to a higher court, this decision still demonstrates there are limits to what individual states can do in terms of regulating biofuels and energy industries differently from what is being done by the federal government in other states.

BF. Agri-Pulse reported that Judge O'Neill found that California's LCFS discriminates against out-of-state corn-derived ethanol and impermissibly regulates extra-territorial conduct. As a result, the Court issued an injunction and also ruled that the California Air Resources Board (CARB) failed to establish that there are no alternative methods to advance its goals of reducing Green House Gas (GHG) emissions to combat global warming. The ruling allows CARB to appeal the decision immediately to the U.S. Court of Appeals, but both the Renewable Fuels Association and Growth Energy have vowed to defend the Judge's decision that California's law is unconstitutional in any appeal that may be filed by CARB. So stay tuned.

ME. Get to the heart of the matter. The presidential candidate priorities and federal court decisions are simply reflections of the ripples in the underlying basic tradeoffs among public perceptions regarding our energy dependence, world hunger, and climate change. There seems to be several fundamental misconceptions about these priorities and interests that are driving the public debate. Which issue priority should carry the greatest weight in making policy decisions? Is it climate change, world hunger, or energy independence?

BF. Regarding climate change, there appears to be a strong consensus in the scientific community that climate change is occurring. However, there is a resounding lack of consensus regarding the implications of the changes or the alternative strategies and their impacts for mitigating the potential consequences of the climate changes. To date, the climate change proposals have demonstrated a practical disregard for the existing geopolitical and economic institutions that manage and sustain the global economy. Cap and trade went down in flames. Indirect-land use concepts were based on fallacious policy response assumptions by intellectuals and academics regarding rights and responsibilities.

ME. Ok, regarding food versus fuel. Food is available to most people in the developed portions of the world at prices that represent 10 to 20 percent of per capita income. The nearly one billion people in the world are malnourished primarily due to proximity to war, terrorism, natural disasters, and low per capita incomes. The low income portion of the world will never be able to afford food, unless there is more stability in their political and economic institutions. Local food access will almost always be a cheaper alternative for serving most of the needs for the malnurished peoples because it is more expensive to ship food around the world. So part of the solutions lie in development of local food and energy resources. Even in the United States, development of local food systems is expanding and providing new opportunities for income in both rural and urban low food access areas.

BF. That leaves reducing our energy dependence on oil imports. Too much of our oil has come from the Middle-East and other nations not so friendly to the United States. National defense and economic security is most often regarded as a higher priority than other issues. In the decade since 9-11, we have increased domestic crude oil production by 20% and cut the 60% share of our domestic oil use from imports down to 48%. Energy conservation and efficiency measures have also had an impact. Development of both domestic oil and gas reserves and renewable energy resources are important because they stimulate jobs and domestic economic multipliers that help insulate our domestic economy from global shocks created by the whims of OPEC.

ME. Maintaining the Renewable Fuel Standard is important for promoting a range of fuel choices, particularly since our present domestic fleet of vehicles and fueling infrastructure favors historic fuel standards, market power, and investment patterns instead of innovative solutions to future environmental challenges and consumer fuel choice. As long as the energy balance from renewable resources is positive, increasing, and greater than nonrenewable resources--which most research says it is--then it is intuitive that renewable energy technologies result in less carbon emissions into the atmosphere than by adding emissions from additional hydrocarbons extracted from the earth.

* Dr. Edelman is a Professor of Economics at Iowa State University and Dr. Flinchbaugh is an Emeritus Professor of Agricultural Economics at Kansas State University.


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